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I'm wondering how much of this money is invested in Bitcoin itself - how much Bitcoin Coinbase is holding onto or own.

It is a smart way for investors to start gathering Bitcoin.

I honestly doubt that much of this is going into buying and holding bitcoins. Institutional investors are already trading big numbers of bitcoins via Second Market. They don't use regular exchanges and certainly wouldn't need to go through the 'false investment' route.

I do however think a large part of this would go towards Coinbase improving its bitcoin stash. They've been running out of stock every single week.

Probably zero if Coinbase is operating above board (which I assume it is).

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